With 27 September 2020 marking the end of the original JobKeeper period (JobKeeper 1.0), eligible businesses need to be aware of the key elements of the JobKeeper extension (Jobkeeper 2.0) in preparation for the changes to the Scheme from 28 September 2020.

JobKeeper Extension Period (JobKeeper 2.0)
From 28 September 2020, the JobKeeper extension (JobKeeper 2.0) begins. There are two extension periods:

Extension Period 1:         28 September 2020 to 3 January 2021
For this period of the scheme you must satisfy the actual decline in turnover test for the September 2020 quarter (July, August, September) relative to a comparable period (i.e. the corresponding quarter in 2019).

Extension Period 2:         4 January 2021 to 28 March 2021
For this period of the scheme you must satisfy the actual decline in turnover test for the December 2020 quarter. It does not matter whether you satisfied the actual decline in turnover test for the September 2020 quarter.

You can be eligible for JobKeeper extension period 2 even if you were not eligible for JobKeeper extension period 1.

If you do not satisfy the actual decline in turnover test
If you do not satisfy the actual decline in turnover test for either JobKeeper extension 1 or extension 2, you can’t claim JobKeeper payment for fortnights in the relevant extension period. You should notify your eligible employees if you are unable to claim JobKeeper payments for them. You should also advise them that you are no longer obligated to pay them an amount that is at least equal to the JobKeeper payment in those fortnights.

Your eligible employees will not be able to be nominated for JobKeeper by any other entity.  

For further information on the JobKeeper extension periods visit the ATO website at:

www.ato.gov.au/General/JobKeeper-Payment/JobKeeper-extension-announcement/

Actual decline in turnover test
The actual decline in turnover test is satisfied for JobKeeper extension period 1 when your current GST turnover for the quarter ending 30 September 2020 (July, August and September) has declined by the specified shortfall percentage (30% for those with an aggregated turnover of $1 billion or less, and 50% for those with an aggregated turnover of more than $1 billion) in comparison to your current GST turnover for the quarter ending 30 September 2019.

The actual decline in turnover test is satisfied for JobKeeper extension period 2 when your current GST turnover for the quarter ending 31 December 2020 (October, November and December) has declined by the specified shortfall percentage (30% for those with an aggregated turnover of $1 billion or less, and 50% for those with an aggregated turnover of more than $1 billion) in comparison to your current GST turnover for the quarter ending 31 December 2019.

For further information on the actual decline in turnover test visit the ATO website at:

www.ato.gov.au/General/JobKeeper-Payment/Decline-in-turnover-tests/

What is different
Unlike when you calculated the original decline in turnover test, you do not use your projected GST turnover for the relevant quarter being tested. You use your current GST turnover.

Alternative tests
Alternative tests for determining actual decline in turnover may be available in some circumstances. These will apply in a similar way to the alternative tests for the original decline in turnover test. However, they must be applied on the basis that the turnover test period is a quarter.

For further information on the alternative tests for determining actual decline in turnover visit the ATO website at:

www.ato.gov.au/General/JobKeeper-Payment/In-detail/Actual-decline-in-turnover-test/?anchor=Alternativeturnovertest#Alternativeturnovertest

JobKeeper Payment Rates
The JobKeeper Payment Rates will change under JobKeeper 2.0. The rate of the JobKeeper payment in each extension period will depend on the number of hours:

• An eligible employee works, or
• An eligible business participant is actively engaged in the business.

It will be split into two rates.

Tier 1 rate
This rate applies to

• Eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
• Eligible business participants who were actively engaged in the business for 80 hours or more in February 2020 and provide declaration to that effect.

Tier 2 rate
This rate applies to

• Any other eligible employees and eligible business participants.

The rates of the JobKeeper payment in JobKeeper extension period 1 are:

Tier 1: $1,200 per fortnight (before tax)

Tier 2: $750 per fortnight (before tax)

The rates of the JobKeeper payment in JobKeeper extension period 2 are:

Tier 1: $1,000 per fortnight (before tax)

Tier 2: $650 per fortnight (before tax)

80-hour threshold for employees

Your employee will satisfy the 80-hour threshold if, in their 28 day reference period, the total of the following is 80 hours or more:

• Actual hours they worked
• Hours they were on paid leave
• Hours they were paid for absence on a public holiday

If your eligible employee satisfies the 80-hour threshold, you can claim the tier 1 (higher) payment rate for them. If they do not meet the 80-hour threshold, you can only claim the tier 2 (lower) payment rate for them.

Actual hours worked
Actual hours worked means the actual hours of work performed by your eligible employee in their employment with you. This may be different than your employees contracted hours, ordinary hours or the hours they have been paid for.

Paid leave
Hours of paid leave means the actual hours of leave:

• Taken by your eligible employee in the 28-day reference period, and
• Paid for in their employment with you.

This includes (but is not limited to) the following types of paid leave:

• Personal or carer’s leave
• Annual leave
• Long service leave
• Employer paid parental leave

Unpaid leave is not counted towards the 80 hour threshold. However, if an employee takes unpaid leave, an alternative reference period may apply.

Paid public holiday absence
When an eligible employee is paid for an absence from their employment with you on a public holiday during their 28-day reference period, you count the number of hours they were paid for that day.

28-day reference period
There are different options for the 28-day reference period that you must use to test whether your employee satisfies the 80-hour threshold.

Your 28-day reference period or periods are based on when your pay cycle ends.

Use either:

• The pre-March period which is the 28 days which finish on the last day of the last pay cycle that ended before 1 March 2020, or
• The pre-July period which is the 28 days which finish on the last day of the last pay cycle that ended before 1 July 2020.

Your employee only needs to satisfy the 80-hour threshold in one of the 28 day reference periods. If they satisfy it in one reference period, you do not need to determine if they satisfy it in other reference periods.

Alternative reference periods
There may be circumstances where the pre-March or the pre-July reference periods are not suitable for some of your eligible employees.

If your employee does not satisfy the 80 hour threshold in the standard pre-March or pre-July reference periods, you should consider whether they satisfy it using an alternative reference period.

For further information on the 80-hour threshold for employees and the alternative reference periods visit the ATO website at:

www.ato.gov.au/General/JobKeeper-Payment/Payment-rates/80-hour-threshold-for-employees/

What do businesses need to do

From 28 September 2020, businesses must do all of the following:

• Work out if the tier 1 or tier 2 rate applies to each of your eligible employees and/or eligible business participants
• Notify the ATO and your eligible employees and/or eligible business participants what payment rate applies to them
• During JobKeeper extension 1 – ensure your eligible employees are paid at least $1,200 per fortnight (before tax) for tier 1 employees, $750 per fortnight (before tax) for tier 2 employees
• During JobKeeper extension 2 – ensure your eligible employees are paid at least $1,000 per fortnight (before tax) for tier 1 employees, $650 per fortnight (before tax) for tier 2 employees

If you are registered for GST and have outstanding BAS statements, you should lodge your BAS for the September 2019 and December 2019 quarters as soon as possible (or for equivalent months, if you report monthly). Unlodged BAS statements may hold up your application for JobKeeper payments under the JobKeeper extension.

What remains the same
You do not need to re-enrol for the JobKeeper extension if you are already enrolled for JobKeeper for fortnights before 28 September 2020.

You don’t need to reassess employee eligibility or ask employees to agree to be nominated by you as their eligible employer if you are already claiming for them before 28 September 2020.

You don’t need to meet any further requirements if you are claiming for an eligible business participant, other than those that applied from the start of JobKeeper relating to; holding an ABN and declaring assessable income and supplies.

For more information on JobKeeper 2.0 please contact Owen, Gary or Didier at the AHA|SA office.